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Council Approves Financing For Powell Center Expansion

OCEAN CITY — As promised, the town wasted no time in trying to start the process to plan for the Convention Center expansion. Yet, one councilman seemingly rehashed his disdain for one part of the project.

City Engineer Terry McGean came before the Mayor and City Council on Tuesday to ask for approval of the town’s portion of the planned 20,000-square-foot expansion of the Roland E. Powell Convention Center, and although he got a unanimous vote of approval for $4.1 million of bonded money, the decision didn’t come without a bit of a fight.

McGean was asking for the town to pass a resolution that would allow the town to acquire the $4.1 million needed for the project on the bond market. When added to the $4.8 million that the Board of Public Works allotted to the town’s partner, the Maryland Stadium Authority, the sum covers the planning and construction of the new bayfront ballroom that is projected to be completed by March of 2012. The resolution, however, would not include the projected $1.6 million, 1,200-seat performing arts center, which is expected to be addressed in a year or so, after studies are done on feasibility.

“Time is of the essence on this project,” said Mayor Rick Meehan. “We made that very clear at the Board of Public Works last week, and I think they realize that we want to get started on this right away so we can begin construction in November and finish by March of 2012, so we can be ready for the 2012 summer season.”

McGean has hired the Salisbury based-Becker Morgan Architectural Group to do the plans for the expansion and said that the cost for the planning will be almost $500,000.

McGean also noted, although the plans to convert almost half of the existing ballroom to the performing arts center will not be included in these “phase one” plans, he said that the potential auditorium would be “kept in mind” during the design.

The town’s portion of the project is funded by the food and beverage tax, which was lowered last year from 1 percent to a half of a percent, and estimates say that the tax is generating a little more than $1 million annually.

With that said, the town is confident that the project will be paid for in far less time than what the town will borrow the money for.

There was some contention however, from Councilman Joe Hall, who has been outspoken since the entire proposal was approved by the town council last year. Hall is not been convinced that a performing arts center can be successful in Ocean City.

Hall argued a point that the town had almost $3 million in the sinking fund where the food and beverage tax money goes, and should consider essentially waiting until the $4.1 million is in the fund and basically write a check for the project, rather than going to the bond market and having to pay interest.

However, that argument was essentially thwarted when it was revealed that the town can’t access the money in the aforementioned account unless it is paying off money that was borrowed.

Simply put, as per state law, the town must borrow the money before it can access the money accrued by the food and beverage tax to pay it back.

In addition, the town revealed that some of that $3.1 million that sits in the account currently is allotted to the town’s share of the previous convention center expansion in 1995.

“I realize that we have to borrow the money to access the money, and I see the reality of the votes that are in place and the project is going to move forward,” Hall said. “But, my job now is to make sure that we have the most effective plan with the least amount of risk in place. I’m not just going to throw up my hands and say, ‘well, you beat me’, I really want someone to prove to me that the performing arts center is going to be a good thing for Ocean City.”

McGean says that the town will be working together with the Maryland Stadium Authority on a feasibility study for the performing arts center so that it can paint a clear picture on how it would benefit the business community and estimate the return to the local and state economy.

“The state supports this expansion because the returns will be more than it costs,” said Meehan. “The ratio on what it will bring in is far greater than what it will cost, and we do have one of the best deals in the state (the food and beverage tax) to lay out how we are going to pay for it.”

Despite Hall’s half-hour banter, he ended up voting for McGean’s proposal, and City Solicitor Guy Ayres will now draw up a resolution that would allow the town to acquire the $4.1 million on the bond market to enable the planning to begin immediately. The first of two required readings of the resolution is expected to be Monday night.

“I know there’s some people that want to see this food and beverage tax stay alive because they think that we would never get it again if it sunsets,” said Hall. “I am in favor of the 20,000-square-foot expansion, but I just want the best project for the town because I know the performing arts center idea is not going away.”